Bell Bank deal apparently dead

Mar. 9—The deal to bring Bell Bank Home Mortgage to downtown Owensboro is apparently dead.

Ed Ray, chief operating officer and counsel for Matt Hayden's Owensboro Downtown LLC, which owns the Alorica Building, said Tuesday afternoon that a federal judge declined to rule earlier in the day on Hayden's motion to force Alorica to agree to terminate its lease and leave its building at 234 Frederica St. so Bell Bank Home Mortgage could move in.

"Today was a critical juncture in (the company's) lease with Bell Bank," Ray said, "a deadline that required (it) to either turn over the space or terminate the lease."

Ray said that without a ruling on the motion, the company "had no choice but to terminate the Bell Bank lease."

"OWB (Owensboro Downtown LLC) will continue to incur damages and, despite OWB's voluntary dismissal of the lawsuit against Alorica, has preserved its right to seek those damages in the future," Ray said.

On Monday, the company filed suit in federal court against Alorica in an effort to get the California-based company to vacate the premises.

"Today, the federal court heard OWB's motion to enforce a termination agreement with Alorica that would have required Alorica to turn over the vacant space and pay a termination fee," Ray said. "Alorica pressed for enforcement of its lease and its continued right to control the vacant space. The court declined to rule on the motion.

"The unquantifiable damage, however, is to the Owensboro community, as the loss of Bell Bank means the space will continue to sit vacant and the additional jobs and companion synergies to the downtown supporting businesses won't be generated for years."

Mayor Tom Watson said, "It's a landlord-tenant issue, but it's affecting the city. I hate to see it."

Bell Bank of Fargo, North Dakota, said last month that it planned to open a mortgage servicing office in the building this summer.

That move would create a $50 million impact in the community, Brittaney Johnson, president of the Greater Owensboro Economic Development Corp., said at the time of the announcement.

She said the company would occupy the third, fourth and fifth floors of the building over the next five years.

Bell Bank said it expected to have 37 employees by the end of the year and 178 by the end of 2026.

Sunny Yu, Alorica spokeswoman, said in an email, "As you know, due to pending litigation, we cannot discuss the details or the facts — not all of which have been reported — but we wanted to clarify some of the inaccuracies that have been shared publicly so that there is no confusion.

"Alorica is still an active tenant of the building mentioned and current on all rent payments, etc. Like all companies, we have had to make changes to accommodate for evolving business needs. For example, as a result of the pandemic, we transitioned our Owensboro team to work remotely, which is why the building has been vacant, so they could continue to earn a living but safely from the comfort and convenience of their own home. Today, we employ approximately 400 people in the Owensboro area, and we continue to hire and grow."

Hayden said in an affidavit filed with the suit that last September, Alorica offered $850,000 to be released from its lease on the building.

He said that Alorica hired his Gulfstream Commercial Services to find a company to take over the lease, and the company found Bell Bank, which he has worked to get into the building.

The affidavit says that Hayden had expected to receive $7 million from Alorica by the time the lease was up.

The suit says that on Feb. 16, Hayden offered Alorica a buyout of its lease for $925,000.

The suit says Alorica counter-offered a buyout of $795,000.

It says that Hayden accepted that offer, saving Alorica more than $1 million.

The suit says that on Feb. 15, Owensboro Downtown LLC entered into a lease with Bell Bank for part of the space formerly occupied by Alorica.

But, it said, Alorica then said it disagreed with some of the details in the termination agreement.

The suit said that action has cost the owners more than $5.5 million, and it asked the court for "fair and reasonable" compensation for its losses.

The court declined to rule on the motion.

Ray said the company may file a new suit seeking damages.

Keith Lawrence, 270-691-7301